People's Q3 earnings down slightly

Tim Loh

Updated 9:27 pm, Monday, October 21, 2013

People's United Financial, the Bridgeport-based holding company for People's United Bank, reported lower third-quarter profit than a year ago as interest income dropped.

Net income in the quarter ended Sept. 30 was $58.5 million, or 19 cents per share. That was down from earnings of $62.2 million, or 18 cents a share, in the third-quarter of 2012.

Per-share profit ticked up slightly because the bank continued its repurchasing of company stock, buying back 2.1 million shares over the third quarter at a weighted average of $14.33 a share.

In total, the bank has bought back 24.5 million of its shares in 2013. Under its repurchasing authorization, it can buy another 8.9 million shares, according to the report.

Excluding one-time gains and losses, profits were $60.8 million, or 20 cents a share, for the third quarter, compared with $64.4 million, or 19 cents a share, a year earlier.

Revenue fell to $311.8 million from $319.2 million a year ago. Net interest income alone was down $10 million over that stretch, to $227.8 million. Analysts polled by FactSet had expected earnings of 21 cents per share on revenue of $311.9 million, the Associated Press reported.

By the close of markets Monday, the stock was trading at $14.40, up 0.2 percent for the day. The bank reported earnings late Thursday.

President and CEO Jack Barnes said in the earnings report that the bank is benefiting from the past few years of expansion, especially in the Boston and New York regions.

"Ongoing progress in loan and deposit growth, both this quarter and over the past 12 quarters, is a tribute to both our relationship managers and customers," he said. "We remain focused on delivering shareholder value by leveraging opportunities within existing markets, including strengthening our position in the Boston and New York MSAs."

"The slight dip in profits from the prior quarter reflects investments in the human capital of the franchise suggesting sometimes two steps forward requires first a step back," he said.

People's long-term challenge, Carusone added, is addressing the moderate growth that's come to characterize the New England banking environment as well as the "structural compression in net interest margins."

Nonetheless, Carusone said investors can take comfort in knowing People's is "well-muscled" financially, and has a strong capital position and a low level of non-performing assets.

People's United Financial has $32 billion in assets, according to the earnings report. It provides commercial and retail banking as well as wealth management services through a network of 410 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.